Borough council overpays £6million to people on housing benefit in Northampton - and wants it back

People on housing benefit in Northampton have been overpaid some 6million and the borough council is asking for it back.
People on housing benefit in Northampton have been overpaid some 6million and the borough council is asking for it back.

People on housing benefits in Northampton owe over £6million in "miscalculated" overpayments to the borough council.

Admin errors, paperwork mistakes by claimants themselves and even fraudulent applications mean the council has overpaid millions to people in Northampton, and are expecting them to give it back.

But figures show that the amount accidentally paid out - and therefore owed back - has grown from £3.6million to £6.1million in the last five years, hinting that the council has been unable to control claiming the money back.

The Citizen’s Advice Bureau for Northamptonshire says anyone feeling the pinch from paying back the oversights should get advice as soon as possible.

Chief executive Martin Lord said: “In most cases, people aren’t aware of the overpayments until the council write to them. That can be the straw that breaks the camel’s back.

“The best advice about overpayments is to get advice as soon as possible. Please don’t sit on it. The longer it is left the more the overpayments will grow.”

The figures come as part of a report into the council’s corporate debt published on January 15, which says the debt, known as “housing benefit overpayments payment”, is part of a national trend.

Martin said: “I think what happens is the rise in zero-hour contracts and flexible labour means the income of people on housing benefit can change often.

“It can be difficult to update the council of changes, and as a result, the council will miscalculate the payments.

“I think it’s a problem that could get bigger. Universal Credit could tackle the issue as it keeps track of income, but we have our reservations about that too.”

The council’s report says less than seven-per-cent of the £6,000,000 debt is “unmanaged”, which means there is no timescale set out to collect it back from claimants.

A borough council spokesman said one of the key reasons for the large outstanding debt is that the Guildhall does not have the capacity to fully check each individual claim.

Instead, it relies on the claimants getting the paperwork right, assisted by a successful Government scheme - Real Time Information - that cross-checks people’s salary details with their claim.

In the last two years, the latter has allowed the council officers to accelerate the rate of debt recovery, although increases in overpayments have tended to still outstrip that clawback.

A spokeswoman said: “Benefit claimants do need to notify the Council of any change in their circumstances and as such, debts usually arise as a result of the claimant not informing the Council. The longer a claimant takes to provide the necessary information, the more the debt will increase.

“The council uses various recovery methods to seek re-payment, but we will always look to make re-payments sustainable and affordable, meaning they may take longer to pay off.”

Northamptonshire’s branch of the Citizen’s Advice Bureau is based in Mercer’s Row, Northampton town centre. For more information, visit their website.

Northamptonshire's branch of the Citizen's Advice Bureau is based in Mercer's Row, Northampton town centre. For more information, visit their website.